Alaska ferry system faces $5 million hit

Rep. Wilson says it's key issue in Southeast

Posted: Tuesday, March 05, 2002

The state ferry system is headed toward a $5 million cut in operations under the annual budget being developed by House committees.

That cut would be equivalent to taking the Taku out of service, although that's not necessarily the action that would be taken, said Capt. George Capacci, operations manager for the Alaska Marine Highway System.

The Taku links Prince Rupert, British Columbia, with Skagway and Haines, and through them the Interior, Capacci said. That could have an effect on the tourism economy throughout Alaska, he suggested.

The House is developing a "hold-the-line" budget that would not allow an overall increase in the state general fund from the current fiscal year.

Due to population-driven programs, some of them with federal strings, there is about $90 million in increased spending that the state can't get around, says House Finance Co-Chairman Eldon Mulder, an Anchorage Republican. Therefore, in order to maintain flat-funding, that much in cuts must be found elsewhere, Mulder said.

In what might be a political disadvantage for ferry advocates, the amount of general fund appropriations for the system actually would go up under the House plan.

The Legislature appropriated about $28 million last year, an amount that hasn't varied much over the past decade. But now a key reserve account has been expended. So Gov. Tony Knowles has asked for a $45 million appropriation to continue the approximate level of service the ferry system has offered in recent years.

The House budget allocation would cut that to $40 million.

"I think it'll make a huge difference in our communities," said Rep. Peggy Wilson, a Wrangell Republican, after a House finance subcommittee meeting this morning.

Wilson, a member of the bipartisan Fiscal Policy Caucus, has pushed for new revenue so that the state can afford to fully fund basic services. She said the ferry component might be enough for her to vote against the whole budget on the House floor, a fairly drastic action for a member of the Republican majority in that chamber.

Capacci said legislators need to keep in mind that the term "marine highway" is intentional.

"It can't be a sightseeing system that always shuts down after the summer time," he said.

Bill McAllister can be reached at

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